Panesar, who had ripped out the New Zealand middle order, saw his figures balloon from a career-best six for 85 to six for 126 in the space of three overs.

New Zealand's overnight batsmen Ross Taylor and Brendon McCullum added 54 runs in the morning and were particularly brutal with Sidebottom, England's leading wicket taker in the series, taking 31 off his first three overs.

But the momentum changed when Panesar was brought into the attack and made an immediate breakthrough.

He ended their 104-run partnership, with Taylor caught at slip by Collingwood for 74.

"It's been really hard and really disappointing these last two Tests thinking that we could compete and win a series and then to let it slip."

New Zealand resumed the final day at 222 for five in their second innings but with Panesar proving near unplayable they struggled through to lunch at nine for 360 in their second innings, still 193 runs short of victory.

With only 19-year-old Southee and one of the world's worst tailenders in Chris Martin at the wicket the match should not have lasted much after lunch.

Instead, Southee went on a rampage scoring an unbeaten 77 off 40 balls, including four fours and nine sixes, and providing the bulk of the 84-run last-wicket stand.

His 50 off 29 balls was the sixth fastest in Test-match history and capped an impressive debut after the opening bowler took five wickets in England's first innings.

"In the two games we won we had to get ourselves out of some tricky positions," Vaughan said.

"In Wellington we were 120-odd for five before Tim Ambrose and Paul Collingwood put together a 164-run partnership.

"When we were four for three here everyone was writing us off. Kevin Pietersen (129) goes and gets us to 250, no one thought that was going to be enough and Ryan Sidebottom comes out, gets seven for 67.

"I guess we played the better cricket."

New Zealand captain Daniel Vettori believed his bowlers were capable of winning the Tests but the side was let down by poor batting.

"I guess it's symptomatic of where we are as a Test team that we're unfortunately not up to scratch with the bat.

Monty Panesar spun England to a crushing 121-run victory as New Zealand went down despite a late flourish by teenager Tim Southee in the third and deciding cricket Test here Wednesday.

The win, to give England the series 2-1 and their first away series win in three years, cemented a determined fightback after they were three wickets down for four runs early in their first innings before reaching 253.

When they destroyed New Zealand's first innings for 168, taking the last nine wickets for 65 in 25 overs, and followed with centuries by Andrew Strauss and Ian Bell to set a 553-run target, the outcome was never in doubt.

After losing the first Test in Hamilton by 189 runs, England won by 126 runs in Wellington before wrapping up the series at McLean Park in Napier, although captain Michael Vaughan noted both victories came from poor starts.

McCullum lasted two more overs before he went to whip Panesar to the legside boundary and was bowled middle stump.

Vettori and Jeetan Patel prolonged the innings a further 14 overs until Patel was caught by Stuart Broad at backward square leg for 18.

Vettori was next to go, caught by Ambrose off the bowling of James Anderson for 43, leaving Southee to bolster the score at the end before Sidebottom bowled Martin for five to win the match with his 24th wicket of the series.